An eventful night at freezing Field Mill last Friday as Mansfield Town stomped to a plum FA Cup third-round tie away at Newcastle United with a 3-0 victory over the Conference flyers Grays Athletic: Grays' full-back Andy Sambrook was sent off for a studs-up challenge early on; two hoofed balls stayed stuck on the roof; and it took all of 27 minutes for the Mansfield fans huddled in the Lower West Stand to raise the first plaintive cry of "Where's the money gone? Where's the money gone?"

Such complaints are not unheard of from supporters of struggling lower- division clubs who would like to see more spent on players, but at Mansfield the exasperated fans have more of a point. Field Mill is hardly the most illustrious or conspicuously wealthy of football hotbeds, yet over the past decade this small-town club has advanced its owner Keith Haslam, the only director, a whacking, unexplained £585,142 described as interest-free loans - and that was on top of a decent salary, £66,444 last year, for working full-time at the club. The club also paid £583,449 to Haslam's holding company, Stags Limited, to buy land for an academy yet to be built - more than £1 million gone to the man who controls the club.

The loans to Haslam personally may be unlawful, a breach of section 330 of the Companies Act 1985, which prohibits a company from making a loan of more than £5,000 to any of its directors. The law was introduced to protect good governance and preserve companies' money. Breaches can be punished by fining the company or director, and even imprisonment, although it is one of many areas of company law which seem to be policed less than enthusiastically and proceedings are rare.

A source told me, however, that the Football Association is aware of the loans and its compliance unit is investigating. Mansfield fans will follow that investigation keenly to see what outcome, if any, it produces. The prospects of Haslam repaying his loans do not appear blindingly promising. In July 2002 TEAM Mansfield, a committed and well organised supporters' trust, decided to bury long-standing concerns about the loans and Haslam's one-man running of the club and instead try to work constructively with him, eventually, they hoped, with an elected director to serve alongside him. The trust raised £33,000 to buy shares in the club and entered into a formal written contract in which Haslam agreed that he would "use his best endeavours to repay all monies owed to [Mansfield Town] within one year" and that the club would not "directly or indirectly make any further loans to Mr Haslam".

In September last year the club's accounts to June 2003 showed that £239,297 which the club had "loaned" to Haslam had been "written off", meaning that amount had gone and would never be repaid. Then in August this year the accounts for 2004 revealed that the club had advanced Haslam more than £90,000 in further interest-free loans, in breach of his agreement. Up to those most recently published accounts there is no evidence of any repayments since the agreement. Feeling furious and betrayed, TEAM Mansfield has instructed solicitors to investigate all possible actions against Haslam.

Where a company has unlawfully loaned money to one of its directors the Companies Act provides, besides the possibility of a fine and imprisonment, that he must repay the money and any profit he has made out of it. "It is surprising," said Adam Kaucher, of the firm Cobbetts, who is acting for the trust, "to see a large loan to a director, which is clearly illegal, simply published year after year in the accounts with no remedial action being taken. We've asked Mr Haslam for his proposals to pay it back in full."

Haslam did not want to discuss this issue with me either before or after the FA Cup tie on Friday, or on the telephone this week, or explain why his struggling club have made such generous loans to him on top of his salary and "written off" £239,297. That has left fans feeling that Haslam is making a good living out of the club - moving in August 2004 to a £775,000 house in the Peak District - while the team subsist on a tight budget for players. Mansfield are currently 21st in League Two, two points off the relegation places.

"We feel our club has much greater potential than this," explained Jeff Barnes, TEAM Mansfield's chairman. "It is loyally supported by a hard core of fans, lots more could be encouraged along and it could be a source of pride in the town. Instead many feel the club is run for the benefit of Keith Haslam and stay away because, at £16 a ticket, they don't want to put money in his pocket."

In the 12 years the club have been owned by Haslam, Mansfield have underachieved compared with their general record of bobbing evenly between the bottom two divisions since joining the Football League in 1931. Since 1993 they have made it out of the bottom division only once, in 2002-03, then went straight back down. Keith Curle, appointed manager in December 2002 with the Stags eight points adrift, complained his budget was too low to assemble a team to keep them up. The following season he led Mansfield to the play-off final where they lost to Huddersfield on penalties; that year the club made a profit of more than £300,000.

In December 2004 Curle was sacked, allegedly for bullying a youth-team player, a charge he denies, and Carlton Palmer replaced him. Mansfield finished 13th last season, then Palmer resigned in September after a 2-0 defeat to Rochdale left them third from bottom of the league. Curle, now manager of Chester City, who beat Nottingham Forest 3-0 in the FA Cup on Saturday, is still suing Mansfield for unfair dismissal. He told me this week: "It wasn't a good environment because the finances weren't made available which could have made the club more successful - the top wage I had for any player was £700 a week."

Haslam's advocates, including Alan Meale, the local MP, point to the redevelopment of the old, crumbling Field Mill into today's all-seat stadium, which Haslam achieved in 2001 by selling part of the adjoining site for a retail park, with significant grants from the old Football Trust. In April 2003 the reconstituted grant-giving body, the Football Stadium Improvement Fund, suspended Mansfield Town from receiving any further grants for three years after concerns over the validity of a grant application.

The Stags' own official website says of Haslam that he "saved Mansfield Town from the brink of closure with a £1 takeover package" and "although many fans have criticised Mr Haslam over the years, his benefit to the club has been immense and in some ways he is the club's saviour".

In the official history, Mansfield Town: The First 100 Years, an entirely unpaid labour of love by two fans, Jack Retter and Paul Taylor, published in 1997, the authors identify the roots of Mansfield Town in a club formed as Mansfield Wesleyans by Frederick Abraham of the Bridge Street Methodist Church. Of present day Mansfield Town they wrote: "Sadly to a large degree this club has lost its sense of direction. It was not created to become a plaything for the gratification of one individual."

There was a strange reaction to the Cup draw on Sunday, which sends Mansfield away to Newcastle for what will be a bumper earner because FA Cup gate money is shared. Though fans were delighted at the thought of watching their team play at St James' Park, many also groaned at another windfall for Haslam, which they believe the team will not see. Listen carefully, on the telly, and you may just hear the faintest of cries from the away end: "Where'll the money go? Where'll the money go?"